Zynga’s Roller Coaster Rides Sees Them Enjoying Some Highs In Third Quarter
Like many we have been pretty harsh on the once undisputed social gaming developer Zynga. Like EA mobile Chief Frank Gibeau it is difficult to overlook Zynga’s miscalculation when it comes to the importance of focusing on the mobile market. With smartphones becoming standard for most of us for a couple of years already, how is it that all the brainpower at such a huge company overlooked this simple fact?
Well enough negative criticism has been hauled at them, their just released Quarter Three results do show some positive signs for the future. With the newly pointed CEO Don Mattrick warning of volatile results, it came as no surprise that it would be an interesting ride as he made significant changes to the infrastructure of Zynga. The good news for Zynga is certainly in their better than expected revenues.
Revenue was $203 million, down 36% from a year ago Bookings were $152 million, down 40% from a year ago. While these may seem bad analysts expected revenues to be only $143 million and report a loss of 4 cents a share. Zynga themselves only expected revenues of $175 million to $200 million with a net loss of $14 to $43 million.
Added to that good news is the fact that Zynga did not report any further job cuts which has plagued them in the last year. They even added a new Chief Operating Officer, Clive Downie to their team. With these better than expected results Zynga’s stock was trading up by 15% to reach $4.08.CEO Don Mattrick has got his work cut out for him but with the latest results being positive there is still many betting on Zynga reclaiming some of its past glory.
Zynga was quick to point out that three out of the top ten Facebook games were still theirs based on daily active users. These were FarmVille 2, Zynga Poker and Words With Friends.
To keep things in perspective, it is still amazing to see how Zynga has failed to retain their player base in the last year. Some of the figures include: Daily active users falling from 60 million in the third quarter last year to 30 million now which is a drop of 49%. Monthly active users fell from 311 million a year ago to 133 million in this third quarter representing a 57% drop.
One worrying factor has got to be Zynga’s fall in the social casino arena, Zynga Poker used to be right up there as the top social casino game but has now been replaced by Caesars Interactive whose games like Slotmania now reign supreme. It was not too long ago that Zynga were betting heavily on their Zynga Poker to enter the real money market in the U.S. Perhaps Zynga officials realized that the rate at which they were losing players would not make it a viable proposition.
We look forward to follow their progress in the fourth quarter. CEO Mattrick sounded upbeat regarding the upcoming months and summed up their current performance,” Our teams are working hard to compete more aggressively on the web, move to mobile and develop new hits, and I am happy with the early progress we have made. We believe our top franchises, Zynga Poker, FarmVille and Words With Friends, can be evergreen in terms of consumer interest, and we are focused on growing these franchises in fiscal year 2014. I am confident that Zynga is rewiring itself in a meaningful way that will strengthen the core of our business and put us back on track to achieve significant long term growth and profits.”